Upgrades
T. Rowe Price Emerging Markets Equity – Silver from Bronze
Mathieu Caquineau
Gonzalo Pangaro has managed T. Rowe Price Emerging Markets Equity since 2009, but his experience in emerging markets began in the 1990s, initially as a Latin America specialist. Mark Edwards, Pangaro’s co-pilot and Asia specialist, retired at the end of 2015. Since then, Pangaro has strengthened his expertise of Asian markets by closely working with the team’s Asia analysts and fund managers. The security selection has been very strong in that region, including in China, in the past four years and a half. The manager uses the team’s various regional experts and research strengths to good effect. Our growing conviction in the fund manager's expertise and his ability to use the firm’s large resources effectively earn the fund an increased People rating of High. The fund also benefits from a well-established process, focused on growth-oriented stocks. Although the strategy’s large asset base makes it less nimble than peers, the focus has always been on liquid large-cap stocks, and the strategy has been soft-closed since 2018, alleviating our concerns. The fund’s clean share class Q is upgraded to a Morningstar Analyst Rating Silver from Bronze. The cheapest classes earn a Gold, while the more expensive classes land at Bronze.
Templeton Global Total Return (Lux) – Silver from Bronze
Patrick Ge
Templeton Global Total Return’s distinct style works over the long term because of the manager’s patience and the team’s expertise, though its high-conviction approach amplifies the potential risk as well as reward in the short run. The People and Process Pillar ratings remain at High and Above Average, respectively. However, under our enhanced ratings framework, which places a greater focus on fees and expected benchmark-relative performance, the Morningstar Analyst Rating for the Z clean share class has been upgraded to Silver from Bonze. Ratings on the other share classes range from Neutral to Gold.
Templeton Global Total Return Bond (UK) – Silver from Bronze
Patrick Ge
Templeton Global Total Return Bond’s distinct style works over the long term because of the manager’s patience and the team’s expertise, though its high-conviction approach amplifies the potential risk as well as reward in the short run. The People and Process Pillar ratings remain at High and Above Average, respectively. However, under our enhanced ratings framework, which places a greater focus on fees and expected benchmark-relative performance, the Morningstar Analyst Rating for the Z clean share class has been upgraded to Silver from Bronze. Ratings on the other share classes range from Neutral to Gold.
RobecoSAM Sustainable Water – Bronze from Neutral
Ronald Van Genderen
RobecoSAM Sustainable Water is one of the oldest water-themed strategies and benefits from a long-tenured lead manager. Although his surrounding team has seen changes historically and his workload needs watching, we think Dieter Küffer is an asset for the strategy. We have gained more conviction in the process, as we think the improvements made since 2012 are durable and effective, and our appreciation for the integration of sustainability throughout the process has increased. Under our enhanced ratings framework, which places a greater focus on fees and benchmark-relative performance expectations, the Morningstar Analyst Ratings range from Neutral to Silver. The N EUR share class sees its rating upgraded to Bronze from Neutral.
Downgrades
Candriam Global High Yield - Neutral from Bronze
Samiya Jmili
Philippe Noyard, who managed the fund since 2003, has relinquished day-to-day management in January 2020 to Thomas Joret, his co-manager since 2016. Noyard took on a global credit leadership role at Candriam, but his passing the torch does not equate to a loss of experience at the strategy’s helm. He remains actively engaged as a co-lead portfolio manager here and continues to influence most investment decisions. Under his tenure, the team has consistently plied a risk-aware and thoughtful process and built a compelling track record. Thus, we maintain Above Average scores on both the People and Process Pillars. As a result, Candriam Global High Yield’s retail R shares are downgraded from Bronze to Neutral under our enhanced ratings framework, which is also the case for the fund’s more expensive shares. Yet, its cheapest shares retain their Bronze ratings.
Note: Under Morningstar's ratings methodology, different share classes of a fund may have a different rating
